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Candace

Talmadge

 

 

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May 1, 2009

Rx for Health Care Reform: A Public Health Care Plan Choice

 

With an international swine flu crisis at hand, health care reform becomes even more critical. All Americans, regardless of employment status, deserve access to health care beyond an occasional hit-and-run visit to an overburdened hospital emergency room.

 

Possibly the best shot for real reform is the public (government) health insurance option devised by Jacob Hacker, a professor of political science at the University of California at Berkeley. He is also co-director of the law school’s Center for Health, Economic and Family Security.

 

Hacker argues for healthy competition in U.S. health care, defining it as a rivalry between private health insurance and a public option that results in better health care and greater health security for all Americans. (Such a private-public combination already exists in programs like Medicare.)

 

“People like choices,” Sen. Chris Dodd, D-Conn., recently told a group of reporters at a Kaiser Family Foundation meeting to discuss health care reform progress. “I want the public option to create opportunities for people who otherwise wouldn’t fit into a private plan.”

 

Hacker structures his proposed public plan along what he calls the “three Rs” of workable public-private competition. First R: Rules that are the same for both the public and the private health insurance plans, all of which would be available in a national insurance purchasing exchange similar to the one in Massachusetts. Second R: Risk adjustments that protect any plan from being competitively disadvantaged if it enrolls a less healthy group of people. Third R: Regional pricing that enables private and public plans to compete within regions on the same terms. This keeps the public plan from competing on a national basis with private plans that are priced regionally, lower or higher.

 

Hacker’s public plan would be Medicare-like, building on that program’s administrative infrastructure and basic coverage but with a separate risk pool and different arrangements for payment and benefits. By this, he means the traditional portion of Medicare that directly pays hospitals and doctors to provide care instead of the government contracting with private plans to provide health insurance (the unnecessarily costly Medicare Advantage boondoggle courtesy of the Bush Administration).

 

The public plan Hacker envisions would be a “self-sustaining, standalone plan that does not draw on public funds,” he explained to reporters. It also offers improvements over Medicare as it exists at present. These include a better payment system, an expanded payment advisory committee, a new stakeholder advisory group, and automatic triggers for review of procedures or payments based on expanded data collection and analysis.

 

Hacker emphasizes that the public plan must have authority to bargain for reasonable rates as a means to control costs over time, a goal that is key to the success of health care reform. Consumer Watchdog, a California-based non-profit organization favoring single-payer health care reform, points out that Massachusetts health care costs have exceeded projections because reform in the Bay State did not include effective cost-control measures.

 

Although cost control is critical, Hacker also argues that health care providers should be fairly represented when the public plan negotiates for prices, and that price bargaining must not negatively impact patients’ access to health care or shift costs to private insurers. He says that the evidence that Medicare underpays providers is weaker than commonly believed, and that so far, there is little substantiation for claims that Medicare bargaining has undermined access or quality.

 

One of the most interesting aspects of Hacker’s proposal plan is the idea of a “medical home,” an upfront payment to physicians who agree to serve as care coordinators for patients. Those who opt for the medical home approach might receive as an incentive reduced cost-sharing, a broader set of benefits, or both.

 

Over time, a medical home enables greater coordination of health care between multiple providers, a real benefit to patients with chronic conditions who are treated by a variety of medical specialists. The medical home can help prevent problems such as conflicts between prescribed medications or duplicate treatments.

 

The medical home might go a long way toward improving U.S. health care overall. A future column will examine the medical home in action.

 

© 2009 North Star Writers Group. May not be republished without permission.

 

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